Europe Adrift, Hellenic Hardship Greases Chinese Wheels

 

Ugh:

Spurred on by government incentives and bargain-basement prices, the Chinese are planning to pump hundreds of millions — perhaps billions — of euros into Greece even as other investors run the other way. The cornerstone of those plans is the transformation of the Mediterranean port of Piraeus into the Rotterdam of the south, creating a modern gateway linking Chinese factories with consumers across Europe and North Africa.

The port project is emerging as a bellwether for Greek plans to pay down debt and reinvent its broken economy by privatizing inefficient government-owned utilities, trains and even casinos. This week, the Chinese shipping giant Cosco assumed full control of the major container dock in Piraeus, just southwest of Athens. In return, the Chinese have pledged to spend $700 million to construct a new pier and upgrade existing docks.

In isolation, this certainly isn’t horrible news; I’m happy to see Greece figure out any way to move forward out of this morass. But the big picture doesn’t look great. The Chinese economic colonization of Africa is already well underway. And the failure of Europe to seriously consider a unifying political solution to their structural economic problems means that the Continent’s soft underbelly is a target of opportunity for venturesome foreign powers looking to pick off the sovereignty of European nations a la carte.

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  1. Profile Photo Inactive
    @MorituriTe

    Used to be Americans did stuff like this, and the natives hated us for it. It will be interesting to see if the same resentment develops toward the Chinese.

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  2. Profile Photo Member
    @ScottR

    Interesting historical reversal: Natives of mysterious foreign lands come to Europe to drag it into modernity.

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    @AaronMiller

    Perhaps actions like these will make the Islamization of Europe China’s problem. China could become an ally of necessity.

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    @DuaneOyen

    If a country can’t get its act together and do what is necessary to survive and prosper, there is no reason whatever that it should reject outside investment, as long as that investment doesn’t destroy its sovereignty or liberty. The question here is how likely that is for Greece.

    This is not that different from the Chinese holdings of US dollars, except that the size of the Greek economy is not sufficient to guarantee its future independence- this is sort of like a struggling company having to let the new bailout investor have two seats on the Board.

    In the case of the US, people pontificate all the time, without a whole lot of thought- Chinese ownership of US bonds is a bigger risk to them than to us. We hold the whip hand and are also their export lifeline. We can afford to block their imports better than they can afford for us to do so, for a variety of reasons.

    My concern is that we’ll probably learn nothing from the Greek experience and blithely continue to trip and dance our way down the same path. In Minnesota, right now, we have the nurses going on strike- why? Pensions.

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  5. Profile Photo Inactive
    @GADean

    Here’s the phrase that stands out: “a modern gateway linking Chinese factories with consumers across Europe”

    Bad news for European manufacturers (and farmers). To mix metaphors a bit, perhaps the “Continent’s soft-underbellyis also the “poorly-guarded gate” in their trade-fortress. The big European markets will be forced to choose between protecting their local manufacturing and carrying Greece and other struggling partners on their own. Even if the European economies slide, the market for low-cost Chinese-made goods will only improve. That port will be busy either way. Seems like a savvy move by the Chinese.

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